#299 - The Hidden Language of NICU Billing with Dr. Scott Duncan
- Mickael Guigui
- Apr 13
- 21 min read
Updated: Apr 29
Hello friends 👋
In this episode of The Incubator, Ben and Daphna speak with Dr. Scott Duncan, Division Chief at the University of Louisville, about the critical importance of medical billing and coding in neonatology. The discussion explores how accurate documentation and thoughtful use of codes can impact everything from individual reimbursement to hospital funding and staffing. Dr. Duncan explains the key differences between critical care and intensive care coding, highlighting how misunderstanding these definitions can lead to missed opportunities for appropriate billing. The conversation also delves into the complexities of CPT and ICD-10 codes, bundled versus unbundled services, and how Diagnosis-Related Group (DRG) systems influence hospital revenue. They discuss how proper coding affects downstream resources, including staffing, and why the financial viability of neonatal units depends in part on getting this right. Dr. Duncan reflects on the need for better education in this area, particularly for trainees, and shares practical resources and upcoming initiatives aimed at helping clinicians build this essential skill set. This episode offers an eye-opening look at a topic often overlooked in medical training, but vital to the sustainability of neonatal care.
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Short Bio: Dr. Scott Duncan attended medical school at the University of Louisville, where he completed his residency and fellowship. He spent 13 years in private practice before returning to Louisville in 2004. He completed a master’s degree in health care administration from the University of North Carolina – Chapel Hill Gillings School of Global Public Health in 2011. He was promoted to Professor in 2017. Dr. Duncan was awarded the Rounsvall Endowed Professorship and became Division Chief of Neonatal Medicine in 2018. His primary areas of interest are the clinical applications of Near Infrared Spectroscopy, and health services research with a focus on quality improvement, healthcare finance and policy.
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The articles covered on today’s episode of the podcast can be found here 👇
Duncan SD, Lakshminrusimha S.J Perinatol. 2024 Oct;44(10):1541-1542. doi: 10.1038/s41372-024-01992-6. Epub 2024 May 9.PMID: 38724604 No abstract available.
Lakshminrusimha S, Song C, Pearlman SA, Martin G, Duncan S.J Perinatol. 2023 Dec;43(12):1535-1540. doi: 10.1038/s41372-023-01704-6. Epub 2023 Jun 24.PMID: 37355710 Free PMC article. Review.
Mercurio MR.J Perinatol. 2021 Oct;41(10):2561-2563. doi: 10.1038/s41372-021-01192-6. Epub 2021 Sep 1.PMID: 34471217 Review.
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The transcript of today's episode can be found below 👇
Ben Courchia MD
Hello, everybody. Welcome back to the Incubator podcast. We are back with Daphna for a special interview that, to be perfectly transparent, we're recording at the CHNC symposium in Denver, Colorado. Today we have the pleasure of being joined by Dr. Scott Duncan. Scott, thank you so much for coming on the podcast and sharing your time.
Scott Duncan MD
Sure. Thank you for having me.
Ben Courchia MD
For the people who don't know you, you are the division chief at the University of Louisville in Kentucky. Beautiful city! One of the few cities in the country that I’ve had the pleasure of visiting. This podcast recording was recommended to us by our good friend Dr. Satyan Lakshminrusimha in California, who said that you were the person that we should be speaking to when it comes to medical coding and medical billing. Not that we're super excited to talking about billing, but that the gaps in knowledge between what we are currently utilizing, knowing, and understanding, versus what we're actually practicing is where I really think there's going to be some interesting conversation. My first question to you is, how did you get to become the coding guru?
Scott Duncan MD
It was strictly coincidental. I spent the first third of my career in a private practice. When the university called and said there was a spot there, my wife had her bags packed before I had the phone hung up, because she was ready to come home. That was fine, but I knew if I was going to go back into this, I was going to go back into it full force. So I worked for a couple of years, recognized I need another skill set, and went back and got a master's in healthcare administration through UNC Chapel Hill. I will throw in a plug for them – that is a perennial top three school for that particular degree. It was a wonderful experience and probably one of the smartest things I've ever done. But then, as coincidences go, there was an opening for the coding committee, which is a committee with the section of Neonatal-Perinatal Medicine in my district. And David Adamkin, who was my division chief at the time, was and remains good friends with Gil Martin and recommended to Gil that I take that spot that was open. And then things have kind of snowballed since then, that I eventually became chair of that committee.
Ben Courchia MD
What's interesting to me is that you, you start this process and you're not disgusted by it. You sort of embrace it. Did you see the potential to promote the work that was being done in neonatology? What was your perspective on it?
Scott Duncan MD
I think it started with the years I spent in private practice. I started off as an old chief resident, so I always liked the business aspects of it. When I started off, I started a nursery from scratch, down in south central Mississippi. Once again, I was always fascinated by the business end of it. Coding, documentation, and billing is a skill set you have to develop over time. Not too many people walk into it having a real good grasp of it. Even members that we bring into the coding committee, we don't expect them to be a foremost expert in it. We're there to help build them up and provide education, not only for the members of the committee, but obviously for members of the section. It just started to snowball up from there, recognizing the aspects of this that is so important to our healthcare, and our healthcare financing as well. During the [MHA] degree program, the two areas that I really loved (which were really, really nerdy) were accounting and finance, and I loved strategic planning. I thought those are two of the most fascinating areas within the master's work.
Ben Courchia MD
And so one of the things that's interesting to me in this conversation is that as neonatologists, we tend to agree with whatever we decide to call ourselves or the care we deliver: neonatologists, neonatal care physician, neonatal intensive care, neonatal critical care – we just don't make any distinction. However, when it comes to coding, the distinction between intensive care and critical care is one that is very important, and that not many people are aware of. People might say, isn't it the same thing?
Scott Duncan MD
Well, the distinction between critical care and intensive care is very important. One thing to note is that you don't have to be a neonatologist to use those codes, and you don't have to be in a NICU necessarily to use those codes. A critical care code basically says that this child's illness is so severe that if you remove therapy, you're looking at imminent demise. Now, there's not any real good definition as to what “imminent demise” is. The other half of that definition goes along with the idea that it requires a fair amount of critical thinking and thought process in order to determine what you're going to do. That's critical care. Intensive care basically says that you need to do frequent vital signs and continuous monitoring. We think of those as our babies who are growing and feeding, and they have apnea spells periodically that don't require a lot of intervention, that type of thing.
Daphna Yasova Barbeau MD
There are some definitions for what qualifies critical versus intensive care. Some people are using the codes but maybe not to their fullest degree. Can you talk about some of those thresholds?
Scott Duncan MD
I think regarding not using the codes to the fullest degree, a lot of physicians don't really want to fool with it. It becomes important from a lot of different areas. Of course you want to get paid, right? That's the first thing that you have to recognize. But in critical care, most of our kids that we think about that would be critical would be those kids who are ventilated, those kids requiring CPAP, those kids who are on prostaglandins, those types of things. If you remove the therapy, once again, you're looking at imminent demise. The thing is our critical care codes are global/bundled codes, with a few exceptions. The delivery room is a perfect example, with a few exceptions. In a delivery room, when you attend a delivery, there's no time frame to it. So if you go in and actively participate in a delivery, you can charge for attending that delivery. If you do nothing more than CPAP, then you charge “attended delivery.” If you provide positive pressure or chest compressions, then you can charge “attended delivery and resuscitation.” If you have to extend beyond that, then you can add the things that you had to do – things like intubation, putting lines in chest tubes, that sort of thing. Once the resuscitation is over and you're into the unit, most of that is bundled into that single global code with a few exceptions. A great example of an exception would be something like a chest tube; a chest tube you can bill for independently. I think a lot of times we see errors in the proper coding for the resuscitation and failure to code for things that aren't bundled together.
The other thing that I think that I see, even with my own group, is not using the proper ICD10 code. This committee has traditionally, in years gone by, focused primarily on the CPT codes. But we've really extended out into the ICD10 codes and the proper documentation as well. The wrong ICD10 code will get your claim denied. Put in an O code (which is maternal based code) on a baby's chart, they're going to kick that right out.
Ben Courchia MD
The one that I've seen the most is “Perinatal Depression,” which is technically a mood disorder in the mother. But they're like, no, the baby was depressed! But that's not what you're coding for, right?
Scott Duncan MD
Yeah, that's exactly right. That's a great example. So if you look at something like hypoxic ischemic encephalopathy, there's about four different codes for that (one of them is a nonspecific code), and then it's graded by severity. This gets a lot deeper and revolves away from the question you asked me, but it's really important. You have to understand facility payment as well. So there's two major ways facilities get paid, particularly with the Medicaid population. Half the states use an APR-DRG (All Patient Refined Diagnosis Related Groups), half the states or a little bit less, use what's called an MS-DRG (Medicare Severity Diagnosis Related Groups). That's what CMS uses. It's a simple method. There's only about six different levels of that, but the payment goes up pretty dramatically from something like $9,000 for a hospital stay to nearly $40,000 for a hospital stay. If you put the wrong HIE code in there, you're going to get the cheaper reimbursement.
Ben Courchia MD
I think that's what we should focus on. I think I've spoken to many people about this, just because I'm curious; I've spoken to people abroad as well because I'm curious about how they deal with coding. In the U.S. many people will say, “I didn't go into this for the money, so it doesn't matter to me. I get paid the same at the end of the month, so why should I waste my time doing this?” I think we don't really understand the ramification of how the hospital on a larger scale sees the revenue generated by the different units, and how that eventually downstream, impacts our field as a whole.
Scott Duncan MD
Yes, it does. What it does is it create resources. So if your downstream revenue is down for whatever reason, you're not going to get the resources you need. Everybody in the US is looking for nurse practitioners now, because residency hours are going to be cut back. And so we all need additional [help]. Satyan [Lakshminrusimha] wrote a paper on that just recently. That does affect your downstream revenue, and it affects your ability to drive revenue sources.
Ben Courchia MD
[In reference to the DRGs], there was a shift in the way medical billing and coding took place in the NICU, I’m not sure when it was. In the past, you could have billed individually for every single thing you did in the NICU. Then it transitioned to a bundle, where basically babies are categorized based on severity and the acuity of their illness. They just fall into one of these select few codes that are available, in terms of the care they're receiving in the NICU. Can you tell us a little bit when that happened and how has that affected.
Scott Duncan MD
A lot of that happened before my time. I've been in healthcare since I was 17, I got 47 years in healthcare. The only constant is it's always changed. Even our physician provider codes have changed across the years. Now you have managed care organizations that are working within the Medicaid population as well. A lot of the states will work on those DRG basis for those. There are still some places that do a per diem basis. There's not a whole lot of them, but there's a few of them that do. The private insurers may pay differently still. Of course there's also additional funds that flow based on whether you're an academic center, whether you're training residents or fellows, and there are other modifiers that goes along with that.
Ben Courchia MD
It removed the opportunity to exploit the system. I was talking to one of the older attendings in my training who said that some people could have gotten away with coding for a cardiac catheterization for an arterial line. That was paid more, apparently. You hear all these stories and you're like, oh my God. I think on the one hand it does help rein in a little bit some of these practices, but it does create a situation in which there's less room for error for the clinicians today and how they code for each of these of these patients.
Daphna Yasova Barbeau MD
How do you think neonatology is specifically impacted by that? The bundled disease code is the same for the 26 weeker and the 22 weeker, though the 22 week may have much higher acuity and stay much longer in the NICU.
Scott Duncan MD
Part of that's impacted by which DRG system to use. The simple DRG system that CMS uses, the MS-DRG, that doesn't allow as much flexibility. The APR or the three MS-DRG systems will allow for more flexibility, because it does severity of illness. There is a mechanism looking for extended length of stay, and when your cost exceeds the DRG by X percentage, you can get additional fund flow then.
Daphna Yasova Barbeau MD
But I think there's still a lot of people who, if you're not familiar with those things, you're not billing and coding for those things.
Scott Duncan MD
That’s correct. I think there's a lot of folks who still work under RVUs as well. And so that's a whole different issue when you think about it. For an individual, you never want an individual neonatologist to work under an RVU system because, for example, we've got about six nocturnists. They're not going to get any RVUs at all. The only thing that gets admission codes at night. Whereas somebody like myself – he said quietly – who's working only day shifts, I'm going to get all the daytime charges. So if you're going to be into a DRG system, you want to make sure that applies for the group, and not the individual. And the other thing is, and I think Mark Mercurio wrote about this, we're working ourselves to death. We push more RVUs per FTE than any other subset. It’s “Neonatology's race to the bottom: RVUs, cFTEs, and physician time.” If you haven't read that, you should.
Ben Courchia MD
Yeah, it's a great paper.
Scott Duncan MD
It's a great paper. We also support a lot of the other practices that don't make a lot of money, [for example] pediatric infectious disease. Dr. Satyan actually was in Louisville last week, h e delivered the Billy Andrews lecture. That's why I kind of trusted. When you mentioned Dr. Satyan, I saw him last week.
Ben Courchia MD
Dr. Satyan is everywhere, all the time. I know exactly which slide you're referencing, where he shows about the RVUs generated by the different specialties, and how much neonatology generates in relation to other specialties. We are one of the most productive specialties across the board, both adult and pediatrics. And yet, our revenues are nowhere near commensurate to the amount of RVUs we generate for the hospital. His call to action was really to say, we need to do something about this, because we're being shortchanged in what we can do and the resources that can be allocated to our patients, our services, and our staff.
Before we get into this, we talked about MS-DRG’s. These groups of codes do tie in with RVUs. If you're looking at number of RVUs being produced, how you've coded during a given year will directly correlate with how many RVUs are being produced. These are not independent metrics. They are very much tied together. People need to know that, because I don't think everybody realizes that these are very much connected.
Scott Duncan MD
Each of the CPT codes has their own RVU assigned to it. The RVU is based upon physician work, practice expense, and malpractice liability. And then there's a geographic adjustment that's put on it as well; it obviously costs more to practice in Los Angeles than it does in Louisville. So they may get a higher payment, based on a little bit higher RVU on the same code. So the RVU’s for the physician workforce is really based on that CPT code. The payments back to the hospital is more based on that DRG system.
Ben Courchia MD
Very interesting. One of the things that's frustrating to me is that this is very much an important part of the sustainability aspect of our specialty. I'm going to speak for myself, but I'm pretty sure everybody's in the same boat. Nobody talks to us about this throughout training from medical school all the way to the end of fellowship, and it's 10-15 years, sometimes. How come no one tells us about this? My question to you is, do you think that there needs to be a movement to make our trainees more knowledgeable, at least about medical billing and medical coding? Then the second part to my question is, if you don’t have the privilege of having any formal introduction to it, what is your advice for people [where they can] learn about this, without following in your path and going through a master's degree where it's a bit more intensive?
Scott Duncan MD
We've actually proposed the idea of having some business aspects of neonatology as part of the fellowship training. For those of us on the coding committee, I always do at least one lecture a year for our trainees on how to do this and do this correctly. Now, your coding committee under the section also is engaged in education. We provide the coding workshop at Scottsdale. We provide a deep dive in the afternoon, and then we also do at least one other lecture on business aspects of neonatal practice. During that particular workshop, we've tried to pair with TECaN and MidCaN to also do webinars, perhaps a little more basic for the TECaN, since that's training in early career, a little more complex for the MidCaN. We're getting ready for Scottsdale this year. I'm going to meet with the coding committee next month, and we’re going to talk about restructuring and how we do the coding workshop, so that the first portion of it is more basics, and then the second portion of it is a little more complex. The resources that you have through the academy are pretty extensive and runs from anything from the coding newsletter to coding for pediatrics. Of course, you can get references from the AMA. The AMA owns CPT. I use Optum as another place that I use for ICD10 coding because of some of the resources they have there. It becomes expensive to do that over time. At one time, we had written the Quick Reference Guide for Neonatal Coding and Documentation, and really have not been able to gain traction to publish a third edition of it, although we would like to do that. I think the thing that we need to think of now is how do we put this electronically, how do we put this into an app?
Daphna Yasova Barbeau MD
Is that the barrier, just that it's changing so often?
Scott Duncan MD
I think it is. I think anytime that you think about how medical education in general has evolved over the years, and how learning has evolved over the years, I think this is an area that we need to think about how we can do it a little bit differently. We're going to look at writing a series of articles on coding and documentation, similar to the series of articles on quality improvement that was published in Journal of Perinatology. I've been in contact with Dr. Gallagher, and I think we're going to put out a series of about six articles. We just need to finish it and formalize it, in order to get it going. Hopefully by 2025 or 2026, we'll see all those in print.
Daphna Yasova Barbeau MD
Perfect. We spent a lot of time talking about kind of the daily codes, but you also had an article in May of this year about neonatology consultation coding. I'm hoping you can talk a little bit about it.
Scott Duncan MD
A little bit, yeah. Which one was that really about?
Daphna Yasova Barbeau MD
Some of the things that neonatologists doing that are not part of the daily code. For example, we have colleagues who are consulting in the cardiac ICU. I have a special interest in palliative care. [Consulting in newborn nursery] – are we using the right code?
Scott Duncan MD
There's a different approaches to that. Let's use the cardiac ICU for one. If you're called and asked to do a consultation in a cardiac ICU and it's a critical care scenario, in that instance, you would not use the global code. The primary physician would do the global code, but you can use a time-based code. Perhaps you're called to help with ventilation in a baby. You look at the ventilator, you make adjustments, you write out a consultation note along with an assessment and a plan, you document the time that you put in on it. Perhaps you stop and intubate the kid for one reason or another. Well, you can use a time-based code. You have to take out the time you spent intubating. Since you used a time-based critical care code, you can charge separately for that procedure, because the time-based codes aren't bundled. So that's one method in a critical care type of scenario.
In other scenarios, there's a series of outpatient codes that you could use, if you're doing prenatal work in the office, for example. What commonly happens to us is we get called for the mother who has come in and she's 23 weeks and ruptured, and you want to be consulted on that. There's a series of codes that can either be based on medical decision making or time. You have to hit that threshold of time in order to bill for that initial consultation. I'm not thinking of it off the top of my head. I think it's 99252. There's a time threshold you have to hit for those. So you document the time you spend in preparation, you spent doing the actual face to face work, you spend following up communicating with the other physicians. Now two weeks later, they call you back and they say, now she is 25 weeks and has some questions they want to ask you about. You don't use hospitalization code or the consultation codes, because you've already done it. You only get one of those per admission. So now, you use subsequent hospital day codes on those. So that's kind of a quick background how you do that.
Ben Courchia MD
What about if – I'm sorry, now I'm geeking out over this – what if the parent has been discharged and is now back? I was thinking are you allowed then to reconsult? Is it a reconsult? I stopped the expert!
Scott Duncan MD
There's a time frame that's associated with it, and I'd have to look it up, to be honest, in order to give you the right answer. There's a timeframe associated with the last time you provided services to them, and I don't remember it off the top of my head.
Ben Courchia MD
No problem.
Daphna Yasova Barbeau MD
I have a separate consultation question. So many people are sub-sub-specializing. You've got the person in your unit you call for neuro and HIE babies, or the hemodynamics team, or palliative care. Is there a way for a neonatologist to code for consults, since they're not the primary team for that day?
Scott Duncan MD
Not if they're the same tax ID and the same practice. All that's going to get gobbled up in your global codes. We've addressed this as a committee a time or two, and we're asked to create codes or at least consider creating codes for different scenarios. Most of those you really can't do.
Ben Courchia MD
Interesting.
Scott Duncan MD
Unfortunate though.
Daphna Yasova Barbeau MD
Yeah. It's a lot of extra time and expertise.
Ben Courchia MD
It de-incentivizes the people who we could leverage for the care of our babies, but there's no incentive there.
Scott Duncan MD
It has to do with the taxonomy codes and whether you're the same tax ID and whether you're the same practice and that sort of thing. We've got a group of neonatologists who do neonatal follow up. They come in and do a consultation with the families before discharge, which -
Daphna Yasova Barbeau MD
- is so valuable for the family.
Scott Duncan MD
Yeah, but – I know you can't see it on a podcast – it's a big zero.
Daphna Yasova Barbeau MD
Some hospital systems will say, well, we can do without that, but it's really so critical to that transition of care for that family.
Scott Duncan MD
You can make the argument it goes back to the value equation. The value equation was originally by Michael Porter, who was a Harvard business guy who wrote pretty prolifically in the medical literature. [Value is outcomes divided by cost.] But we've added a lot to the top of that equation, and cost isn't always the only answer to it, right?
Daphna Yasova Barbeau MD
I have some questions about business of medicine, but did you have more coding-related questions?
Benjamin Courchia MD
No. I just wanted to mention something that, to me is important. I think some people in the US may say that this is a typical US problem, but that's not true. I've spoken to colleagues in Canada and to other colleagues around the world, coding is the lifeline of their practice. They are actively being coached on how to code appropriately for their patients, because the sustainability of their departments is directly tied to their ability to code effectively. There is a variety of different things. I've seen places where they have little workshops for new hires. I've seen units where there's the one guy who's going to basically tutor everybody else in how to code. But it is not a US-centric problem. It's something that everybody is doing as medicine globally is turning from a charitable endeavor to more of a business.
Scott Duncan MD
That's a great point. I think it's easy to look at our healthcare system and say we could do better. I think any healthcare system could obviously do better, and we could do more for less, and so on and so forth. But I really think we have an outstanding healthcare system, if you compare apples to apples. That's the big issue is comparing apples to apples. We probably need to provide some basic services that aren't necessarily paid for. We've grown up in a system that pays for illness rather than pays for wellness. That's a huge issue. If I had a good solution to that, I'd be a rich guy lying on the beach.
Daphna Yasova Barbeau MD
To that point, you went out and got the extra training. I feel like at some point in time, many decades ago, physicians were much more ingrained in how hospitals ran, how their own practices ran, how their outpatient clinics have run. But there's now this dichotomy where we have administrators and then we have people providing the health care, which is good and bad. My question to you is, what responsibility do we have as physicians, neonatal health care professionals, to remain aware of the business of medicine? I feel like we've gotten so far away from it that we no longer have any control over how some decisions are made about our practice.
Scott Duncan MD
I think that's where you have to educate your administrators as much as anything else. They're not on the front lines. There was a paper written recently, and I think either the Association of Academic Division Directors or one of the other groups, had some brief touches on this called Administrative Harm. That's decisions that were made without realization that downstream effects on your patient population, or on your workforce for that matter as well. From my standpoint, in order to provide good care, there are times where we need to educate the administrators as well. Instead of saying, you can do more for less, we need to say, here's what we need in order to do more.
Daphna Yasova Barbeau MD
Any tips on addressing the C-suite? What's the best way to bring this to their attention? What data are they looking for?
Scott Duncan MD
Oh, that's way too broad of a question. You always have to narrow it down to about a 10-minute conversation or less. If you wanted to put me to sleep, put me in a room and start showing me slides. In about 10 minutes, I'll be gone. Even when you're thinking about education, if you really want to lose folks, start with an hour lecture, and by 10 minutes they've wandered off and they're texting on their telephones. Even in the 10-minute lectures, they wandered off. You’ve got to get it down to short bits, and you have to make it things that they recognize and that the administrators understand. I'd like to think that we overall have really good relationships with our administrators. We've integrated healthcare systems. University of Louisville and Norton Children's Medical Group is a great health care system, and it's doing a really nice job. I'm able to meet with them and work with them on a regular basis, meet with a hospital administrator at least every other month, meet with the chief medical officer at the same time frame, executive vice president for pediatric service line along that same time frame, even my department chairman on a regular basis. All of that is good to be able to sit and just go over issues to address.
Daphna Yasova Barbeau MD
I like that. Are there tips for educational resources for people who are interested in learning more about the business of medicine?
Scott Duncan MD
Well, the academy has a bunch of resources, obviously. There are degree programs. I'm sure there are certificate programs. I know Harvard's got certificate programs. Even our school started another master's in healthcare administration at Louisville. The other route to go actually is through public health. We talked quite a bit about the concept of business in medicine, but I think public health is something that really we need to focus on as well. When you're thinking about diversity, equity, inclusion and inequity in the care we provide, I think that's another route to really look at with a critical eye and consider advanced degree work in. We're able to at least offer our fellows certificates in certain areas. Health profession's education would be one, but some of our fellows, since they put a little skin in the game, I have one fellow who we're going to hire who's getting a master's at the school of public health.
Benjamin Courchia MD
Sometimes it starts with these little certificates, where you get a little certificate and you're like, I want a bigger certificate.
Scott Duncan MD
Absolutely. It also makes you marketable.
Benjamin Courchia MD
Scott, thank you so much for taking the time to spend these 30 minutes to speak to us about this. This was very enlightening, and I hope that it's going to make people reflect and think a little bit harder about the health of their departments and of their institutions and try to take steps that will bring more longevity to their respective units. Thank you.
Scott Duncan MD
That's great. Thank you for having me.
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